Ride-hailing, Driver Power, and the Contest for Surplus in the market of shared mobility in Indian cities

The February 2026 launch of Bharat Taxi marks an unusual development in India's ride-hailing market. Unlike Uber, Ola, or Rapido—owned by private entities—Bharat Taxi is a driver-owned cooperative with visible government backing. If the government's stated ambitions materialize, this represents more than simply adding competition. It signals whose power shapes how urban mobility platforms organize themselves and distribute surplus.

This article examines what Bharat Taxi's emergence tells us about driver bargaining power in India's ride-hailing market—how it never disappeared, how it reasserted itself, and where it might lead.

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Drivers Were Never Fully Atomized

Standard accounts of platform capitalism emphasize how apps atomize workers—turning them into isolated contractors subject to algorithmic control. In India's ride-hailing sector, this story is incomplete.

Auto-rickshaw and taxi drivers have always multi-homed across multiple apps, retained the option of offline street hailing (which allows informal surge pricing through direct negotiation), and remained embedded in unions and local associations. If they were ever locked in, it was with their unions, not with any app.

There was perhaps a transitional period when ride-hailing apps first arrived—drivers were more atomized, and the pull of incentives outweighed collective bargaining. This brought considerable numbers of drivers outside existing union structures. But once the market matured, demand became inelastic, and private platforms shifted from burning cash for market share toward profitability, collective action re-emerged. Drivers previously outside union fold were incorporated, and opposition to platform market power intensified.

Equally important: prices in this sector have never been fully liberalized. Auto and taxi fares continue to be set by government-appointed bodies. Before ride-hailing platforms, these regulated fares served as reference prices for metropolitan mobility. Uber and Ola changed this with dynamic pricing—surge and dip pricing promised better matching of supply with demand. But this increased earnings volatility for drivers, breeding resentment even when average earnings didn't decline.

Non-systematic evidence suggests that platforms using fixed-fee, no-surge models now quote prices close to these regulated fares—often comparable to or slightly higher than dynamic pricing on private platforms, especially outside peak hours. We've reached a stage where platforms are no longer in price competition, at least in the auto-rickshaw segment in many metros.

From Efficiency Gains to Surplus Contestation

Before app-based aggregators, the central problem in cities like Mumbai and Pune was availability. Matching riders and drivers relied on physical hailing, repeated search, and uncertainty. Relaxation of permit restrictions increased supply, and apps dramatically reduced transaction costs through improved matching and predictability. Early welfare gains were real and substantial, even without large price reductions.

As platforms scaled and the market for shared mobility became an established urban feature, contestation over surplus emerged. Commission-based models allowed platforms to appropriate a share of every ride. Algorithmic management gave them unilateral control over incentives and rule changes. Earnings volatility for drivers increased, and surplus distribution shifted toward platforms.

This did not go uncontested. Drivers' collective action—long a feature of urban transport—reasserted itself through periodic strikes, fare negotiations, and opposition to bike-taxi platforms (reflecting concerns about competition for auto-rickshaw drivers). What initially looked like atomization returned as broader collective mobilization.

The market moved from a phase of efficiency creation to one of surplus contestation. Platform-based availability became definite. The question became: who gets the bigger chunk?

Driver Power Shaped Institutional Change

Out of this contestation emerged institutional responses driven by driver bargaining power.

Namma Yatri was the pivotal development. A mission-driven private platform operating without commissions using fixed fees, it did not emerge in opposition to unions—it collaborated with them. Built on open protocols aligned with ONDC vision, it demonstrated that a commission-free model could work in practice. Its significance lies in what it enabled: drivers operating on private platforms could now credibly threaten exit, forcing Uber and Ola to adopt similar fixed-fee models, primarily for auto-rickshaws.

Bharat Taxi takes this further through cooperative ownership. Here, drivers are not merely platform users but members. Cooperative ownership promises not just better terms today, but control over future rule changes. This is the institutional expression of driver bargaining power—organized suppliers securing not just better contract terms but ownership of the platform itself.

The pattern is clear: private profit-maximizing platforms initially captured surplus through commissions. Driver collective action contested this. Mission-driven platforms demonstrated alternatives were viable. Cooperative ownership now institutionalizes driver control.

Where This Leads: Three Possibilities

What equilibrium does this produce?

Scenario 1: Bharat Taxi flickers out. Cooperative governance at scale proves difficult. 300,000+ heterogeneous driver-members face collective action problems. Innovation slows. Government support proves insufficient or inconsistent. Bharat Taxi becomes a niche player or fades. Private platforms continue dominance, but with lesser ability to extract surplus through commissions or by using outright fixed fee subscription models.

Scenario 2: Bharat Taxi improves competition. It establishes itself as a credible alternative without achieving dominance. Drivers continue multi-homing. The threat of exit to Bharat Taxi constrains platform commission rates and rule changes. Consumer welfare improves from competitive pressure. Driver welfare improves from stronger bargaining position. The market sustains multiple institutional forms.

Scenario 3: Bharat Taxi dominance recreates regulatory capture. Aggressive government backing enables market dominance, particularly in auto-rickshaw segments in major cities. Pricing control reverts to cooperative governance influenced by the same unions that historically captured fare-setting committees. The pre-app pattern returns: strong producer power, limited competitive pressure, resistance to innovation. The difference is that capture is now institutionalized through platform ownership rather than operating through government committees. We're back to supplier control over urban mobility—now with smartphones in hand.

The Concern About State Backing

This is where government backing of Bharat Taxi becomes concerning. It's not simply another competitor entering the market. State support can tip the equilibrium toward the third scenario—dominance and reversion. When the state backs a platform owned by organized suppliers, it risks recreating the regulatory capture that plagued urban transport before apps arrived and which is on display now near any suburban railway station in Thane district, a geography of dormitory towns where people lodge and board to work in Mumbai.

The unions backing Bharat Taxi are the same ones that opposed bike-taxi platforms because bike taxis compete with auto-rickshaws at lower prices. This is rent-seeking behavior. Empowering these unions through platform ownership and state backing doesn't eliminate market power. It shifts control from platforms to organized suppliers. The idea of using one potential threat to nullify another potential threat sounds audacious, but we must recognize the unsavory equilibriums it can throw.

What This Tells Us

India's ride-hailing market reveals how driver bargaining power shapes platform evolution. Drivers were never fully atomized. Their collective action didn't disappear—it adapted. Cooperative platforms didn't create driver power; they institutionalized it.

The question is where institutionalized driver power leads. Does it produce better competitive outcomes by constraining platform rent extraction? Or does it recreate pre-platform supplier dominance, now with government backing?

There is nothing inherently wrong with driver collective action or cooperative ownership. But history shows cooperative enterprises often succumb to governance issues and mismanagement. And India's regulatory history shows that organized supplier groups consistently capture regulation which proves hard to correct.

My assessment: Scenario 1 is most likely—Bharat Taxi flickers out due to governance challenges and scale difficulties assuming government does not pull the sleeves too much to course correct the market. Scenario 2 is possible if government support remains considerable but limited and multi-homing persists—Bharat Taxi improves competition without dominating. Scenario 3 is the nightmare—state-backed cooperative dominance recreating pre-app regulatory capture, with pricing controlled by collective body of drivers that have strong and natural affinity for creating entry barriers.

The market moved from solving availability to contesting surplus. Driver power shaped that contest. Bharat Taxi is the latest expression. Whether it betters the market or recreates old pathologies depends on whether driver power remains one force among several, or becomes the dominant force backed by state power.